You don't need an expensive camera to capture great photos. In fact, some of my favorites have been taken with a camera phone or plastic Holga. But if you do invest in a decent camera, you owe it to yourself to invest in a lens that allows creative freedom. I made that leap recently, going from a middling digital camera to a Canon EOS 50D. I got the kit, with its all-purpose lens. But then I also bought a 50mm lens (f1.4) and it's completely changed the way I shoot. In fact, photography is just more fun now.
Ever since my weekend of shooting in the French Quarter, I've been taking walks around my neighborhood at dusk, playing with my camera and getting to know it a little better - learning how things like white balance can completely change the feel of a photograph, or how opening the aperture wide allows for great bokeh effects.
I'm also having more fun shooting for this blog. Still lifes don't fill me with quite as much dread these days, knowing that I can finally achieve the shallow depth of field that I admire in so many beautiful, dreamy photographs. I could never capture that effect with my last camera, a fact that always frustrated me.
The only thing that hasn't changed for me is my photo editing software. I still don't know my way around Photoshop but I find iPhoto to be about as easy as it gets. In the end, they're just tools. But they're tools that have given me a new creative perspective - and that's been worth every penny.